North India has emerged a hot spot for IT and IT-enabled services industry with many large companies setting up their businesses here. While Shimla and Chandigarh are among the top cities with investment potential, it is the National Capital Region, including Gurgaon and Noida, that is becoming the preferred destinations for companies offering IT, ITeS, BPO, BTO and KPO services in various domains such as banking, financial services, insurance, pharma, auto, FMCG and manufacturing.
According to a study by Assocham, Bangalore may lose its crown of India’s Tech Eden to Gurgaon and Noida. The study showed that leading IT and ITeS vendors prefer to shift their focus from Bangalore to other cities — especially the satellite cities of Gurgaon and Noida — to generate more revenues.
Assocham interacted with around 800 directors, CEOs, CFOs, chairmen and managing directors of Indian and multinational companies in various verticals with a choice of five cities to relocate their businesses to garner more revenues.
Conducive environment
As many as 30 per cent of the top-ranked officials of IT companies based out of Bangalore said they prefer to shift their business to Gurgaon. Of the remaining, 25 per cent respondents said they would prefer to shift their base to Noida or Greater Noida which are rapidly developing software and BPO hubs. About 20 per cent said that they would prefer to shift their base to Chandigarh, which offers a conducive business environment.
“Gurgaon’s cosmopolitan culture, modern infrastructure, availability of skilled workforce and proximity to Delhi along with industry-friendly government policies are the factors which give it the edge,” Assocham said. Some of the top names in IT, including HCL, NIIT and Genpact, are based in NCR . “The advantages we see in this part of the country include good infrastructure with better connectivity within the area. Another major enabling factor is the relevant pool of resource/talent available due to the spread of reputed educational institutions in this area,” said the NIIT Technologies spokesperson. The company has 4,700 employees in the NCR region across three offices spread over 7.8 lakh square feet. Himachal Pradesh is portraying itself as an alternative location to the NCR. Nasscom conducted an extensive survey amongst 11 cities/ towns to find out the relative advantages/disadvantages of these cities/towns to attract IT investments.
The survey discovered that Himachal Pradesh is uniquely positioned to exploit its inherent as well as inculcated plus points for furthering IT in the State.
The major advantages include excellent power situation, salubrious climate eminently suited to IT industries, capability to increase the pool of skilled manpower, engineering colleges and other educational institutions, low cost of setting up an IT unit as well as low recurring cost (including cost of living).
Software tech park
Chandigarh and Jaipur are the other emerging cities for IT investors. The Software Technology Park in Mohali is the top exporter of software among the Tier 2 cities in North India. It is also one of the top three software exporters amongst the Tier 2 cities in India. Chandigarh got a boost for IT investments when the Government set up the Rajiv Gandhi Chandigarh Technology Park. “Chandigarh, being one of the first planned cities in India, always had an extremely good civic infrastructure and power situation. The connectivity to Delhi is excellent due to the Shatabdi trains and has, therefore, attracted many companies to consider the Tricity as an alternative location in North India,” says a PwC report.